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French Housing "In Total Meltdown", "Current Figures Are Disastrous"

Tyler Durden's picture


If Venezuela is the case study of a country in the late stages of transition into a socialist utopia, then France is the clear runner up. The most recent case in point, aside from the already sliding French economy, whose recent contraction can be best seen be deteriorating PMI data...

... which hints at the dreaded "triple dip" recession, nowhere is the economic collapse in France more evident than in its housing market which as even Bloomberg admits, citing industry participants, is now "in total meltdown."

The reason? The belief of the socialist president that a few economists know better than the overall market, especially when the sanctity of the "fairness doctrine" and the greater good is to be upheld at all costs. To wit: "French President Francois Hollande’s government may have made a housing slump worse, pushing the construction market to its lowest in more than 15 years. Housing starts fell 19 percent in the second quarter from a year earlier, and permits -- a gauge of future construction -- dropped 13 percent, the French Housing Ministry said yesterday."

The reason: a law that was passed this year that seeks to make housing more affordable by capping rents in expensive neighborhoods. To protect home buyers, the law also boosted the number of documents that must be provided by sellers, leading to a decline in home sales and longer transaction times.

Of course, it didn't take long for the government to realize its mistake and to scramble to adjust the rules, but "the damage is done, threatening France’s anemic recovery that’s already lagging behind those of the U.K. and Germany."

Enter the soundbites: “Construction is in total meltdown,” said Dominique Barbet, an economist at BNP Paribas in Paris. “It’s difficult to see how the new housing law is not to blame.”

Barbet says the drop in home building lopped 0.4 points off France’s gross domestic product growth last year and cut the pace of expansion by a third in the first quarter. Expenditure in the sector was at its lowest level ever as a portion of total real GDP in the first quarter at 4.7 percent, down from 6.3 percent in the first three months of 2007, he estimates.

Sales of new-build homes fell 5 percent in the first quarter from a year earlier and are down by about a third compared with their level in 2007, according to Credit Agricole.

It's not just the government to blame, though: central planning, which has made the rich richer beyond their wildest dreams has pushed prices near all-time highs in the Paris are, making real estate inaccessible to all but the richest, and leading a crunch in new construction and the associated spending. This is further impacted by the country’s record jobless claims, which in turn is leading to a plunge in sales and profits at building material and electrical equipment makers including Cie. de Saint-Gobain SA, Lafarge SA, Vicat SA, Schneider Electric SE, Legrand SA and Rexel SA.

Enter more soundbites: "Current figures are worrying and will be disastrous if nothing is done; clients of the building sector are sounding the alarm bell,” Pierre-Andre de Chalendar, chief executive officer of Saint-Gobain, said this month. “It’s as though everything is being done to discourage investment in housing.”

Alternatively, it is as if everything is done by a socialist government to boost the economy. The outcome almost without fail is the same. Alain Dinin, chairman of property company Nexity (NXI), concurs.

“The French residential real estate market has been in a particularly tough situation,” he told investors after last week posting a drop in first-half revenue. “A host of complex regulations have been introduced and, most importantly, buyer sentiment has suffered. All those factors have combined to slow the already historically-low rate of new homes entering the market.”

The direct threat of this housing collapse is that the country's already lowered GDP forecast may end up sliding to 0%, if not negative:

Reduced home construction is threatening Hollande’s goal of increasing GDP by 1 percent this year. The International Monetary Fund slashed its 2014 French growth forecast to 0.7 percent this month from 1 percent previously. The IMF expects expansions of 1.9 percent in Germany and 3.2 percent in the U.K., as well as growth of 1.2 percent in Spain.


Hollande, who has been trying to revive an economy that has barely grown in two years, is grappling with a record 3.3 million jobless claims and an approval rating that’s at the lowest level ever for any French president.


Construction has the advantage of being an industry that’s easy to revive and lifts the broader economy by leading to the hiring of less-skilled workers and spurring private investment, economists say.


“A recovery in construction would help the rebound but it won’t happen without government initiative,” said Ludovic Subran, chief economist at Euler Hermes in Paris. Building is “a sector where the impact on growth and employment is felt immediately.”

Sadly, the underlying problem is one which even China has figured out has no solution, and where a housing sector saddled with insurmountable debt has only one short-term "fix" - even more debt to boost sales for another quarter or two, while kicking the can of the inevitable collapse a little further, assuring that the plunge, when it comes, will be worse than anything experienced.

In France, it is no different, and the "solution" is to do more of what has not worked:

State-controlled financial institution Caisse des Depots is starting talks with public and private investors to raise funds to build several tens of thousands homes in the greater Paris region, where the lack of available land and a rising population has boosted housing prices.


“If we invest public money and funds from the Caisse, we must lure private investors,” Caisse des Depots CEO Pierre-Rene Lemas said in a July 6 interview. “Some talks are starting with a view to conclude by the end of the year.” Sylvia Pinel, who replaced former housing minister Cecile Duflot in April, has also introduced measures to revive the construction market, and cut some rules to reduce construction costs.

At the end of the day, the only thing left is what has so far prevented the world from imploding since the Lehman collapse on the back of trillions in central bank liquidity: preserving public confidence at all costs.

“What is important for France is to reassure people, to reassure everyone who wants to invest and to restore confidence,” Lafarge CEO Bruno Lafont said in an interview with Bloomberg Television last week, calling for simpler rules, lower construction costs, and incentives for institutional investors to invest more in housing.

But, as Bloomberg summarizes it best: "It may be too little too late."


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Wed, 07/30/2014 - 12:53 | 5023102 froze25
froze25's picture

Not unexpected, we will see further unraviling of the EuroZone.  Winter is coming.

Wed, 07/30/2014 - 13:05 | 5023155 hedgeless_horseman
hedgeless_horseman's picture



Real estate in France still seems very reasonable to me, compared to the USA, as long as you are not exposed to their income tax.

Par example:

4 bedrooms

168m2 habitable - m2 Terrace

3900m2 Land - Price 1.195.000 Euros,for-sale-villa-tourrettes-sur-loup,5...

Wed, 07/30/2014 - 13:08 | 5023173 813kml
813kml's picture

It could use some modern upgrades, like a tall pole from which to fly a white flag.

Wed, 07/30/2014 - 15:41 | 5023913 pods
pods's picture

Don't the Chinese like French cuisine or what?


Wed, 07/30/2014 - 16:31 | 5024186 Excursionist
Excursionist's picture

Too many L's in names of French foods..

An order of sou-fray could be a challenge to place.

Wed, 07/30/2014 - 21:32 | 5025514 StychoKiller
StychoKiller's picture

You're confusing Chinese with Japanese; Japanese has no equivalent to the letter 'L', but Chinese does.

Sun, 08/03/2014 - 10:54 | 5040157 Analyse2
Analyse2's picture


In fact this ugly disdain and pitiful jokes come from the firm refusal of the French to join America in Irak, in 2003.

Since France refused to go to Iraq, American warmongers and neo-cons made French army look like cowards – as a punishment.

But History has proved the French were right, and that the WMD were only a dirty trick to serve as a pretext.

Nevertheless, the hate of american warmongers against France remains still there, well alive, even in ZH.

This stale hate still shows through "innocent good jokes" about the “surrender monkeys” and their white flag … As for the rest, the French can be proud of their Military History which remains despite these stupid jokes by far the best military record in Europe.

Wed, 07/30/2014 - 13:09 | 5023180 walküre
walküre's picture

Can you afford the upkeep or is your family large enough? That's the bigger issue than the price. If they had a vinyard instead of the dreaded grass, it would be worth a fortune. I guess you could grow Artichokes if the water supply is good.

Wed, 07/30/2014 - 13:38 | 5023299 highly debtful
highly debtful's picture

Methinks HH is speaking in jest. 1.2 million euros is a prohibitive price for middle class Europeans. 

Wed, 07/30/2014 - 13:16 | 5023213 desirdavenir
desirdavenir's picture

why not go to Lozère instead ? Sky in the winter, near the south coast, no boring neighbour, at half the price

Wed, 07/30/2014 - 14:42 | 5023596 foxenburg
foxenburg's picture

Asturias. better coastline, better mountains, better food, better house, better price.....

Thu, 07/31/2014 - 08:47 | 5026724 tonyw
tonyw's picture

don't forget their annual property tax.

blinking tourettes blinking blinking:-0

it's all a case of location, cheaper and more expensive properties in both USA & France.

Wed, 07/30/2014 - 13:26 | 5023253 Occams_Chainsaw
Occams_Chainsaw's picture

Let them build with cake....

Wed, 07/30/2014 - 13:34 | 5023286 The Longest Call
The Longest Call's picture

Bring in Blackrock, not to worry...

Wed, 07/30/2014 - 14:56 | 5023681 Kirk2NCC1701
Kirk2NCC1701's picture

Not surprising, given that the London market is doing the opposite:  Up, way up!

That's because London is "doing God's work"* and Paris is not.  /sarc

* Quote from GS CEO, Lloyd Bankfine

Thu, 07/31/2014 - 08:49 | 5026728 tonyw
tonyw's picture

Also, so far no high annual property tax in London but this may change with the next government.

Wed, 07/30/2014 - 20:34 | 5025266 radiobomb
radiobomb's picture

''winter is comming'' ....... and perhaps Russian gas isnt.

Or is it ?   Wonder how the sanctions translate to the 2 aircraft carriers currently under construction for Russia by Fr...?

Sun, 08/03/2014 - 11:01 | 5040184 Analyse2
Analyse2's picture


France is far less dependant on gas and fuel than a lot of other countries. The French tend to prefer electric heating as 75% of their electricity is produced by their nuclear plants (USA 19%, UK 18%, Japan 18%, Germany 16%).

Using figures from 2012, Germany is the largest gas importer in Europe at 3065 billion cubic feet annually. Next is Italy with 2359 billion, then Britain with 1734, France with 1600 , then Spain with 1225 and Belgium with 1084 (half of which it uses itself and half it re-exports).



Wed, 07/30/2014 - 12:54 | 5023103 gdiamond22
gdiamond22's picture

It is amazing how people believe in this Socialist crap. Would never happen in the USA....oh wait

Wed, 07/30/2014 - 13:01 | 5023133 Jackagain
Jackagain's picture

Sadly many people want the government to be their nanny & their god.

Wed, 07/30/2014 - 13:07 | 5023158 Manthong
Manthong's picture

"Sadly many people want the government to be their nanny & their god."

Sadly many people in government want to be the peoples nanny & god.

Wed, 07/30/2014 - 13:20 | 5023236 zaphod
zaphod's picture

What was exceptional about America was for a brief period in time it was one of the only groups of people to not think this way.

But then the early 1900s progressive movement started and within a generation a majority looked to government to fix their problems. America has not been exceptional for over a hundred years now, has spent the wealth created during its exceptional era, and is now going to see the true effects of losing what made it exceptional.

Wed, 07/30/2014 - 13:39 | 5023307 gdiamond22
gdiamond22's picture

Exactly right.

Socialists/Progressives/Communists - they ALL are like tics, latching on to a healthy host; They  see a thriving capitalist society and feel the need to extract power from it, preying on the less fortunate; making empty promises; the government is here to help. Completely ignoring history that this always fails, but depending on the dumbing down of the citizenry to maintain power.

I fear the blood has been sucked dry and the host is on its last breath.

Wed, 07/30/2014 - 14:17 | 5023371 SofaPapa
SofaPapa's picture

Yep.  When the US became independent, the colonists were a group of people who had self-selected to get themselves out of a system with this kind of dependence attitude and take the risk of settling a new land (this included kicking the locals off, but the point is the same).  This group was by definition interested in self-sufficient living.

As the settlements grew, however, the same old cancer returned.  People who wanted to depend on others to "protect" them, to "provide for" them, to "help" them.  We are now the same system that the colonists originally left.  This experiment cannot be repeated.  All parts of the world are now settled or in settlement.

Any solution at this point is going to have to be evolutionary within a given culture.  That's a much taller order.  I pray we are capable of it.

Wed, 07/30/2014 - 23:05 | 5025904 Anusocracy
Anusocracy's picture

The individualists left the ant colony to develop a new land.

Once it was up and running, the ant colony followed.

And they are still coming.

Thu, 07/31/2014 - 08:53 | 5026744 tonyw
tonyw's picture

over a hundred yearsago very few governments provided much

Wed, 07/30/2014 - 13:07 | 5023165 Citxmech
Citxmech's picture

If anyone has any doubt of this, check out the first pic here:

What a monument to our collective, commercialized, slow, suicide this clown is.  Does he even see the irony?

Kneel before your masters and praise them, eh? 

Wed, 07/30/2014 - 12:55 | 5023110 Al Huxley
Al Huxley's picture

They should outsource GDP measurement and reporting to the US.  That would fix up their economy quickly and at very low cost.

Wed, 07/30/2014 - 13:03 | 5023148 Icewater Enema
Icewater Enema's picture

Just wait a month. They haven't finished adding up all the hookers and drug deals contributing to Eurozone GDP. As soon as they add that in, everything will be fine. Housing won't matter.

Wed, 07/30/2014 - 14:00 | 5023397 MidwestJester
MidwestJester's picture

We haven't really been faced with the bill here yet....I'm thinking the cost may be more than expected :P

Wed, 07/30/2014 - 12:56 | 5023115 Magooo
Magooo's picture

Wed, 07/30/2014 - 12:55 | 5023116 blabam
blabam's picture

Price controls work! Just ask the Fed. 

Wed, 07/30/2014 - 12:58 | 5023119 drink or die
drink or die's picture

Need a good war to knock down all those old buildings, so the builders that are currently out of work can build new ones.  That should raise GDP enough so people can afford to buy housing (or at least a drastic population dropoff will cause prices to be more affordable).  Where is my nobel prize in economics?

Wed, 07/30/2014 - 16:48 | 5024272 Zero Govt
Zero Govt's picture

You've read Krugman haven't you?

..where wealth is created by high explosives

Wed, 07/30/2014 - 12:57 | 5023122 yogibear
yogibear's picture

The greater socialist deserves what they get.

Don't worry the US will be there as the Federal Reserve created housing bubble #2 in the over-priced areas.

Wed, 07/30/2014 - 12:57 | 5023124 jubber
jubber's picture

To be fair France is about the only Country where you can buy a house at a very decent price, say a 3rd of a UK however hard to come buy

Wed, 07/30/2014 - 13:08 | 5023169 Citxmech
Citxmech's picture

Just don't try and maintain it - the VAT taxes will kill you.

Wed, 07/30/2014 - 12:59 | 5023126 williambanzai7
williambanzai7's picture

Wed, 07/30/2014 - 13:02 | 5023137 813kml
813kml's picture

And no experience required!!!

Wed, 07/30/2014 - 13:14 | 5023205 dontgoforit
dontgoforit's picture

Great whole in won.

Wed, 07/30/2014 - 16:01 | 5024049 falak pema
falak pema's picture

genghis kunt is a killer!

Wed, 07/30/2014 - 13:00 | 5023131 basho
basho's picture

“What is important for France is to reassure people, to reassure everyone who wants to invest and to restore confidence,”

no doubt, that will do the trick. reassure people.

first you screw them by saving the banks and not the citizenry, then you put sanctions on RU and reduce the job mkt, then you reassure them. good plan

Wed, 07/30/2014 - 13:06 | 5023160 Al Huxley
Al Huxley's picture

Maybe they could hire Draghi to give a quick speech on how rosy the French outlook is - he seems to have the gift.

Wed, 07/30/2014 - 14:35 | 5023563 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Reassurance that the people will be fucked once more.

Wed, 07/30/2014 - 13:01 | 5023134 NoDebt
NoDebt's picture

What France needs right now is some "hot money" flowing in from Asia to buy up everything in sight (over $1MM, of course) to juice the numbers.  Too bad they did that whole "we hate the wealthy and will take 80% of everything they got" tax.

Wed, 07/30/2014 - 13:04 | 5023152 Al Huxley
Al Huxley's picture

That's not a bad idea, but I think it's more complicated than necessary.  What's really going on is far less important than what the media and government agencies SAY is going on.  They just need to improve their lying skills.

Wed, 07/30/2014 - 16:47 | 5024264 icanhasbailout
icanhasbailout's picture

France has a bright future as a Russian warship factory

Wed, 07/30/2014 - 13:07 | 5023142 Tachyon5321
Tachyon5321's picture

Thomas Piketty and Paul Krugman, two of the greatest polical economist of the 21st century must be so proud!

Wed, 07/30/2014 - 13:02 | 5023143 youngman
youngman's picture

Their wheat crop was terrible flowered from to much rain.....sorry Frenchies

Wed, 07/30/2014 - 13:06 | 5023161 813kml
813kml's picture

Frenchies will be fine, what's bad for wheat is good for frogs and snails.

Wed, 07/30/2014 - 13:12 | 5023194 Uncle Remus
Uncle Remus's picture

Wait - is that a contradiction?

Wed, 07/30/2014 - 13:12 | 5023189 walküre
walküre's picture

Bullish for WestUkraine?

Wed, 07/30/2014 - 13:42 | 5023323 negative rates
negative rates's picture

No! Sorry you, now you get to carry the baby bump load and even blame that on the french, too bad sweety, it's all down hill from here wit no way out.

Wed, 07/30/2014 - 13:05 | 5023145 CPL
CPL's picture

Pour mes compatriotes français;

 Make their lives miserable as possible by stop helping them. Grind them to millet against the stone instead of trying to burn down the mill shop that we all use. We all know who these bastards are. Pick them off one at a time and like dominoes they will fall. They are all soft and pampered pieces of shit and these people, their days are simply RUINED if their dry cleaning isn't on time and in a little baggie.

  • Turn off their water and power at their place with shovels and axes.
  • Stop selling them food (shit ATM is down, sorry).
  • Don't let them fill up at the pump (ATM is down...sorry).
  • Screw with their cell phones (Magnets like magic dawg!).
  • Screw with their internet (Yes, I'm Mr so and so I would like to down grade my plan to anal rape by the second. Yes I love being charged extra, sign me up for everything and phone often to tell me. Here's my cell number and a bunch of other people I know).
  • Take down their websites.
  • Shut down their meridian systems and reroute calls.
  • Leak all their information everywhere.
  • Stick banana's in the tail pipes of their cars.
  • Put sugar in their gas tank.
  • Put coat hanger in the grills of their transportation so it shreds the belts.
  • They go to a bar or eat out, you 'customize' their meal and serve nothing but Mickey Finn's.
  • Break their elevators in their pretty ivory towers. or better...just don't fix them when they break.
  • Parking lots are always full when they arrive.

There is more than a million ways to demolish them all without putting your lives in danger. It's up to each of you to figure out how to best leverage the position. Ask questions. "Hey man where do you work?, on the Hill? Great...yeah lot is full, thanks, there's parking about a mile away I think. Good luck."

Illustrate how much you do not want them there by denying them all service. If they don't listen. Then you don't have to listen to them anymore either. That simple.  They are now all persona non grata and uninvited to the benefits we all provide daily.  Shut them out and shut them all down.   

Les affamer de leurs tours.


Wed, 07/30/2014 - 13:12 | 5023193 DoChenRollingBearing
DoChenRollingBearing's picture

What an interesting post, so chock full of ideas, well done!

Wed, 07/30/2014 - 13:13 | 5023199 tuttisaluti
tuttisaluti's picture

and put bbq fire starters under their tires

Wed, 07/30/2014 - 13:16 | 5023212 dontgoforit
dontgoforit's picture

Les' Miserables!

Wed, 07/30/2014 - 13:17 | 5023220 Chief Wonder Bread
Chief Wonder Bread's picture

Helpful hint:

potatoes are cheaper than bananas.

Wed, 07/30/2014 - 13:41 | 5023313 Save_America1st
Save_America1st's picture

"Stick banana's in the tail pipes of their cars."



Wed, 07/30/2014 - 14:03 | 5023410 _disengage_
_disengage_'s picture

Lots of interesting ideas. One more I'd like to add: boycotting their companies would probably be the most damaging thing one could do.

Wed, 07/30/2014 - 16:50 | 5024283 icanhasbailout
icanhasbailout's picture

and if you get Ebola, you know where to go to lick the doorknobs

Wed, 07/30/2014 - 13:05 | 5023162 slightlyskeptical
slightlyskeptical's picture

So Fannie and Freddie were wrong to not put limits on loans, while when France does do it, it is also the wrong thing?

So what if because of regulations, a bigger fool is unable to take the inventory off the current fools at higher prices?

Wed, 07/30/2014 - 13:21 | 5023237 blabam
blabam's picture

Loans have nothing to do with this. 

Wed, 07/30/2014 - 13:25 | 5023250 Clycntct
Clycntct's picture

Give it time. 

Open borders and new youth with only wornout sneakers are the next housing boooooooooooom.

Wed, 07/30/2014 - 16:50 | 5024292 icanhasbailout
icanhasbailout's picture

MDR TB ain't gonna house itself...

Wed, 07/30/2014 - 13:09 | 5023175 falak pema
falak pema's picture

lets put it this way :

France is in post meltdown mode already. Its not trying to increase production or consumption. Its trying to batten down and wait for the reset.

The higher you go the harder the fall. 

So stay low and tighten your belts is what is on the menu. 

Borrowing costs are low for this government and complacency is also part of the mix. Lets see how this plays out for Euro zone.

Wed, 07/30/2014 - 13:08 | 5023176 desirdavenir
desirdavenir's picture

Must be the socialist government !

And not, I repeat, not the fact that housing/salaries is at twice its historical norms, and thus in a bubble waiting to pop. Last week I heard of Mende, main city of Lozere, where one can buy a 90M² house on a 650m² ground on the fringe of the city for around 200 000 €. Mende has no industry worth mentionning, no population, and barely any agriculture around (save a few sheeps). Actually, the funny fact is that everybody around me:

  1. agrees that housing price is crazy ;
  2. that one must buy now or be priced out forever.

So maybe it is a good news that housing collapses in France...

Wed, 07/30/2014 - 13:57 | 5023311 falak pema
falak pema's picture

Must be, as your team now has a ecology program that is so half and half that its neither here nor there. In fact its all hot air.

And, if housing price collapses for sure the price of electricty will rise and you know why but pretend you can control it.

Apart from anything else France's nuclear program has hidden the cost of decomm for existing plants (est at over 1 billion Eur per existing nuclear unit (58 in all)-- and that is probably low-- PLUS the cost of safer WAste treatment than currently "stuff into ground and forget"!

As for Forty plus years ALL governments conveniently forgot to provision for these costs, THAT THE WHOLE WORLD KNEW ABOUT SINCE 1979  AND TMI meltdown...its time to pay the piper...Mama Mia. 

How do you bring share of nuclear down to 50% as promised and still tell the Nuclear Industry that overall nuclear electricity will STAY at current levels of power production; aka producing 75% of all electrical power and 20% of overall primary energy consumption?

Do the math its NOT possible to reconcile 50% of electricity AND also keep total nuclear at current capacity in absolute KW capacity. 

Also, after having been the lowest recycler of municipal waste in developed Europe, having created the most Mussonlinien marriage between corporate oligarchs and government in a MONOPOLY partnership called Eco Emballage--just like everywhere else in housing, autoroute infrastructure, water distribution--you name it--how are you now going to play catch up ball with Germany and others who already recycle more than 85% of municpal whereas France is at 50% especially for plastics? 

Trying to close the barn door once the horse has bolted! You are 20 years too late. I know what I talk about I was a recycler. The whole scheme has been one huge rip-off to protect the Oligarchs-- who use the green points tax for their own buddies at low subsidised rates (incestuous corporate buyback schemes) and do not support payback to the municipalites at fair price for the recycled material, thus to milk the tax payer via the municipal local taxes hiked up to make up for the short fall. Bravo.

This has been going on for Twenty years under both Socialist and Conservative governments.

A true red/blue bureaucratic cum oligarchy mafia scheme.

Desirdavenir and BRAVITUDE, LOL ! We'll see how that works. 

Ball in your court! 

Wed, 07/30/2014 - 20:24 | 5025220 radiobomb
radiobomb's picture

totally agree Falak Pema.

The other unspoken scandal is the Nuclear powerplant safety reports the EDF publishes do not tally with the independant reports of the ngo body that monitors the reactors.

Also, the recycling of FR low-level radioactive waste was a branch of the EDF [gov owned], then sold to a friend of the president, without public tender, for knock-down prices. Directly afterwards the law was changed to allow pan-european radioactive waste to be processed [which means long distance rail transport of that waste etc] and boosted revenue more than 10x, but the structure no longer belongs to the FR taxpayer......


Wed, 07/30/2014 - 13:09 | 5023178 ebworthen
ebworthen's picture

Ron Insana and Steve LIESman on CNBC doing their best Tweedledee and Tweedledum.

Meanwhile, interest rates up.

Wed, 07/30/2014 - 13:11 | 5023187 Quinvarius
Quinvarius's picture

People who print money to save banks will have neither.

Wed, 07/30/2014 - 13:13 | 5023195 DadzMad
DadzMad's picture

"Construction has the advantage of being an industry that’s easy to revive and lifts the broader economy by leading to the hiring of less-skilled workers and spurring private investment, economists say."

Less skilled my ass.  In pretty much any life situation I'd take one of my electricians over some dipshit economist.  My wife is in banking and I once had to attend a holiday party in Chicago with her for some big wigs.  Once they found out I used to be an electrician in the field I was bombarded with "how to" questions that were borderline retard. 

Sorry to vent, but this attitude really chaps my ass.

Wed, 07/30/2014 - 13:16 | 5023214 ebworthen
ebworthen's picture

Most PhD's couldn't change their oil or replace a light switch, and it is often reflected in their character.

One of the greatest crimes of the 20th Century was the drive to equate education and occupation with character and intelligence.

Wed, 07/30/2014 - 13:30 | 5023271 NidStyles
NidStyles's picture

You can thank organized religion for that one. Something about trusting your Catholic Priests around children.

Wed, 07/30/2014 - 14:15 | 5023477 SofaPapa
SofaPapa's picture

"One of the greatest crimes of the 20th Century was the drive to equate education and occupation with character and intelligence."

This is why I find the whole student loan bubble so doubly destructive.  Not only is it putting a generation in debt (I wish they were smart enough to avoid it, but the incentives are very strong), it is also propagating this theory that we should all be middle managers and that this is the model of a successful society.

I am constantly reminded of the wave of migration out of Russia and Eastern Europe during the collapse of the Soviet Union.  Huge waves of educated professionals trying to fit into a society where there is already a complete professional class in place.  Not everyone should be pushing paper.  But the telescreens keep hammering home the message: "success equals training to be a paper pusher."  We will now have our own generation of educated professionals released on the world that doesn't need more of them.  We need people who know how to make things run.  Priorities are completely out of whack.

At the base of it is the same problem discussed on here ad nauseum: we accept paper as "value".  Until people realize the difference between tangible wealth and the counterfeit paper symbols of that wealth, I expect no great change.  That recognition can't come soon enough, though.  The ongoing damage is stunning.

Wed, 07/30/2014 - 13:18 | 5023219 Uncle Remus
Uncle Remus's picture

I'll take "Skilled Craftsman after SHTF" for $1000 Alex.

Wed, 07/30/2014 - 13:13 | 5023197 Bill of Rights
Bill of Rights's picture

Treasury sells $29 bln in 7-year debt at 2.25%
Bidders offer $2.58 for each $1 in 7-yr debt sold
Indirect bidders buy 47.4%; direct bidders buy 15.2%

Wed, 07/30/2014 - 13:13 | 5023202 firstdivision
firstdivision's picture

Que EU to allow Russian oligarcs to sidestep sanctions to buy real estate in 3...2...

Wed, 07/30/2014 - 13:15 | 5023206 Uncle Remus
Uncle Remus's picture

French President Francois Hollande is looking at his watch wondering how much he can get for it...

Wed, 07/30/2014 - 13:16 | 5023211 Itchy and Scratchy
Itchy and Scratchy's picture

Mon Dieu!

Wed, 07/30/2014 - 13:18 | 5023218 dontgoforit
dontgoforit's picture

The farther one goes from the light, the darker the future appears.

Wed, 07/30/2014 - 13:20 | 5023235 Itchy and Scratchy
Itchy and Scratchy's picture

Socialism is fabulous ...............until the other dude runs out of $$$!

Wed, 07/30/2014 - 13:38 | 5023301 q99x2
q99x2's picture

Somebody paid all these global assholes to be elected so they could take over the world and steal everybody's money. Do they plan on leaving the planet or what. 

Wed, 07/30/2014 - 13:38 | 5023303 BGO
BGO's picture

Does a 600 sq ft apartment in Paris still cost +$1M?

If so, the French need to STFU, pronto.

Wed, 07/30/2014 - 15:11 | 5023772 Singelguy
Singelguy's picture

The only problem is that foreigners are buying up all those $1M apts. the average working french citizen cannot afford to live in Paris.

Wed, 07/30/2014 - 17:17 | 5024400 ajax
ajax's picture



Paris, London, NYC, Geneva, Zuerich - all of them are off limits financially for most people. The great thing about living here in Europe is the train system ie you don't need to live in the cities to work in the cities and you don't need a fucking car with all the charges that entails (not to mention time spent in traffic going nowhere).

Thu, 07/31/2014 - 09:03 | 5026777 tonyw
tonyw's picture

Don't exagerate, look around London and you will see eight million people, they're not all alien lizards.

Pretty much in all capital cities there will of course be more desirable areas and these will be more expensive than e.g. areas a bit further out.

Its demand and supply, many of these cities don't have much room to build within the cities and residents don't like to have huge tower blocks so they're not going to knock houses down to build more dense housing.

Wed, 07/30/2014 - 13:42 | 5023316 orangegeek
orangegeek's picture

But US GDP is now 4%!!!!


What happen???

Wed, 07/30/2014 - 17:13 | 5024373 honestann
honestann's picture

They threw darts to determine the GDP.

But first, they removed the minus sign.

Wed, 07/30/2014 - 17:27 | 5024447 cooky puss
cooky puss's picture

They didn't, their monkey did. Credit where it's due!

Wed, 07/30/2014 - 13:44 | 5023325 Itchy and Scratchy
Itchy and Scratchy's picture

Another socialist visionary crashes and burns ...who wudda thunk it?

Wed, 07/30/2014 - 13:50 | 5023334 Latitude25
Latitude25's picture

Why is this disastrous?  In a socialist state you would expect the state to provide your housing, not the free market place.  In a socialist state you would expect the market for houses to collapse since citizens get housing from the state.  Next time the US housing market collapses expect the nanny state to start giving away free housing.  

Wed, 07/30/2014 - 14:07 | 5023361 Duffy
Duffy's picture

I do not understand why the French people - the ethnic, European French (and Bretons, and Catalans, etc. historically existing within France) are allowing themselves to be demographically suicided by waves of immigrants who care little about French (or Breton, or Catalan) history, culture, identity, etc.

Is it that the French are afraid, if they suggest leaving the EU to reduce immigration after decades of it, that someone will say the word "racist" at them?

What's the word which means not thinking European peoples have a right to, if they wish, remain a majority in their own homeland?


Or are Europeans not entitled to homelands?


What, exactly, is the idea.  Look, nations change, nothing last forever, *most* immigrants just want to work hard, have a better life, and maybe in the long run Europe and its people will be better off for it - but Ireland, Norway, Sweden, Denmark and probably the Netherlands are definitely not better off for it. 


I don't grasp how the world has been convinced that a healthy society would actually remain bla·sé about the prospect of its own genetic/cultural/unique identity's been a couple., few decades and its clear what the trend is - why not arrest it?



Wed, 07/30/2014 - 14:37 | 5023574 WTFUD
WTFUD's picture

Fair enough Duffy!

The Uranium ( 80% of Electricity ) comes from Niger and boy what a fucking mess it has made to the lives of the Touareg people and Environment.
I could go through the ECOWAS countries ONE by ONE and make points in each where the FRENCH have fucked them over for DECADES and still do so.


Wed, 07/30/2014 - 14:40 | 5023590 marathonman
marathonman's picture

'Foreign' population is a sign of success.  It's when those guys bail out you know the SHTF.

Wed, 07/30/2014 - 15:28 | 5023828 falak pema
falak pema's picture

You have to understand why these non europeans came there in the first place :

They came when the economy was booming and when the Industry Oligarchs wanted cheap docile labour to do their dirty work that Unionised local labour of local origin did not want to do. In France it was for motor car production in the 60s and building boom in the 70/80s. Over 3 million people from ex French colonies came as cheap labour then.

They then had children and these were parked in the ghettos, or what became ghettos in the subsequent slowdown that began with the second oil hike, when it went structural and long term, aka 1978/79.

So now 35 years later that population has become 5/6 million and is not that well integrated as it should be. The slowdown and resulting ethnic resentment and poor white backlash and political party use thereof has contributed to that trend in France as elsewhere.

The dumbing down of western society in "instant coffee consumermista mode", aka "I want it all and I want it now at a click of a mouse",  post Internet, has accelerated that social decline. The new generation has even less social conscience than their fathers. 

So your question is as dumb as the times are dumb and as minds have gone numb. 

Its not a question of ethnic origin, its a question of cultural and educational process that has broken down. 

Our value systems are all phucked up. Its called decadence of the times. It lets all the devils out from Pandora's box. 

Read history, it happens on a recurrent basis. Nothing new, even in so called advanced societies.

Wed, 07/30/2014 - 16:44 | 5024255 Zerozen
Zerozen's picture

Is it that the French are afraid, if they suggest leaving the EU to reduce immigration after decades of it, that someone will say the word "racist" at them?

Yes. They fret and obsess over it. Being called a racist is like the ultimate crime. Hell even here in the U.S. it's almost like that - a recent survey showed that Donald Sterling was more hated than the convicted gangster-tattooed-thug murderer Aaron Hernandez. Why? He spoke poorly of blacks.

Like falak pema said...totally, utterly decadent societies that have become hollow and shallow and have their heads up their asses.

I don't know of any other race that deliberately puts itself down and willingly defers to other races/foreigners on its own home turf.

Wed, 07/30/2014 - 13:56 | 5023376 All is chosen
All is chosen's picture

A roof over your head in the land of your birth. How did it ever become so important to others? Nothing to do with greed or exploitation I suppose?

I doubt the somewhat malign, smug and warped British influence of the last 20 odd years has helped. "Pwoperty always goes up". No dears, not with French death taxes it doesn't . Never mind the ever present concern in La Belle of affordably keeping warm each winter without your own forest.


Question: Help! I am struggling with this software. How do I see comments I have made please? I asked a question about banking a few days ago and can't remember which article it was on? - Thxs.

Wed, 07/30/2014 - 15:33 | 5023870 DoChenRollingBearing
DoChenRollingBearing's picture



Perhaps here:


You can search Zero Hedge via Google like this (inside quotation marks):

" is chosen, July"  <-- and similar

Wed, 07/30/2014 - 17:57 | 5024527 All is chosen
All is chosen's picture

Thank you gentlemen. I had tried the 'user comment' search directly, but it was coming back blank. Maybe it is an Android issue. Thxs to you both the problem is sorted :)

Wed, 07/30/2014 - 15:35 | 5023871 DoChenRollingBearing
DoChenRollingBearing's picture



They're zapping me lately!  Sorry for the duplicate post

Wed, 07/30/2014 - 14:04 | 5023415 Jack Burton
Jack Burton's picture

"central planning, which has made the rich richer beyond their wildest dreams has pushed prices near all-time highs in the Paris are, making real estate inaccessible to all but the richest,"

Og course this is true in London as well. They are actually working a program to ship tens of thousands of people out of the city of London because the housing benefit they are paid simply is too high for local government's to handle. Thus they are found new homes outside London. This sounds all fair and good, just what the market dictates, BUT, thousands who are being forced out in the clearnance, are just the people who do all the work that keeps the rich and the financiers world functioning. Health Care workes, cleaners, food servers and cooks, drivers, all sort sof low level clerical, street maintainers, you name it. Forced outside the city where they need to ride tube or train for hours oneway to work. The rich life the life they earned, but they also need to consider that their servants need to be able to get to work and service everything that makes a world work. I know financiers believe THEY make the world work, they are the job creators and market winners. SO be it, but without the workers, who wipes their asses for their kids, and all the jobs that pay 7Pound an hour.

Wed, 07/30/2014 - 14:12 | 5023461 Joebloinvestor
Joebloinvestor's picture


Oh wait, they already tried that.

Wed, 07/30/2014 - 14:41 | 5023601 kchrisc
kchrisc's picture

"I'm melting."

Wed, 07/30/2014 - 14:49 | 5023645 CHX
CHX's picture

Central planning at its finest.

Wed, 07/30/2014 - 15:01 | 5023711 novictim
novictim's picture

So, how much have home prices dropped in middleclass suburbs of Paris?  What are the numbers?

Wed, 07/30/2014 - 18:39 | 5024762 Dien Bien Poo
Dien Bien Poo's picture

The trouble with this article as with many is that the title is misleading. The economists talk of a catastophe in construction numbers, not housing prices. Im not saying they are not related but in truth Paris, La Cote D'Azur and various other class A investments are all at all time highs pricing wise. Sure new construction is getting hammered by various stupid new laws but its not translating into price falls. yet.

The article seems to be written for the CEO of LaFarge and other construction people.

Wed, 07/30/2014 - 19:50 | 5025065 radiobomb
radiobomb's picture

agreed, but Hollande has also announced a 2nd home tax, and a tax for foreigners holding FR property [though not if principle residence] on top of the other high taxes that are rising faster than inflation.  Disuading investment, and cooling the holiday-home market. 

He also proposed an 'internet tax' which would be payable on purchase of a device capable of receiving video content at around 1% of price of purchase !!!! [Fr does not own global online video content, but would like to get revenue from it].....

their next president is looking like Marine LePen, the far right wing fascist who won the local elections by landslide earlier this year.....

Round here, houses have been for sale for a few years with no buyers.... the high end is selling still though [>1m€], as is the low end [<100k]. Not much inbetween.

prognosis ;  Dans la Merde.

Wed, 07/30/2014 - 16:11 | 5024084 lakecity55
lakecity55's picture



France Surrenders to ISIL
 Hollande to build Mosques

Wed, 07/30/2014 - 16:14 | 5024099 Super Hans
Super Hans's picture

Cheese eating surrender monkeys!

Wed, 07/30/2014 - 16:21 | 5024129 gcjohns1971
gcjohns1971's picture


I thought the FRENCH bureaucracy was different.

I thought that only the best of society were chosen, and compensated with free time and high pay as incentive.

Surely THE BEST OF SOCIETY can make a sustainable comfortable life for French Society?

Wed, 07/30/2014 - 19:37 | 5025022 radiobomb
radiobomb's picture

colluche quote ; 'my father was a functionaire, and my mother didnt work either.....'

Wed, 07/30/2014 - 17:56 | 5024539 honestann
honestann's picture

News Flash: Private conversation released.

Politician (PO) and central banker (CB).

PO:  Why stop at $1M.  Why don't we just drive house prices up to $10M for a tiny fixer-upper.  That way everyone feels rich.

CB:  That's the idea.  We're working on it.

PO:  Great!  Get to it then!

PO:  But I have a question.

CB:  Sure, what?

PO:  Not everyone owns a home.  How can they afford $10M homes?

CB:  No problem.  $3000 down payment, we lend them the rest.

PO:  Great!  Get to it then!

PO:  Sorry.  Another question.

CB:  Yeah, yeah.  What now?

PO:  What's the monthly payment on a $10M home?

CB:  Depends on the current interest rate.

PO:  Well, give me an example.

CB (pokes calculator):  $28,000 per month and up.

PO:  What interest rate is that?

CB:  Zero percent, of course.

PO:  $28,000 per month?  Or $2800 per month?

CB (pokes calculator again):  $28,000 per month.

PO:  Wait a second.  Most people are lucky to clear $28,000 per year after taxes.

CB:  I don't know anyone who doesn't earn more than $50,000 per month.

PO:  I don't.  Well, not officially anyway.

CB:  Well, there you go.

PO:  Wait.  Another question.

CB:  I have a meeting at JPM soon.  Hurry up.

PO:  Every generation 100M new people are born in the USA.

CB:  So what?

PO:  Well, they don't own a home.  They have to buy one.

CB:  So what?

PO:  Well, if they can even make the payments, they'll have nothing left over to buy food, cars, fuel, utilities... much less donate to political campaigns!

CB:  Don't worry, we'll donate all you need.

PO:  That's not my point.

PO:  What about the rest of the economy?

CB:  What about it?

PO:  The more they pay for mortgage payments, the less they have to spend on everything else.  And "everything else" is the economy.

CB:  So?

PO:  In two generations, the economy will be destroyed and the entire nation will be abject poverty.

CB:  Oh, we'll be okay.

PO:  We?  Who is we?

CB eyes twinkle, walks to the door.

PO:  Just to make sure I understand this right.

CB stops at the door.

PO:  What happens if you stop printing and lending?

CB:  Who else would lend to those useless eaters?

PO:  I dunno.  You tell me.

CB:  Loan sharks.  12% interest rates... at least.

PO:  And what happens to home prices?

CB:  They collapse... probably to 1/10 or 1/20 their current prices.

CB:  And so they could not borrow against their homes any more.

CB:  And they'd default in droves and destroy the economy.

PO:  You mean the banks.

CB:  The banks are the economy, as far as we're concerned.

PO:  Yeah, but the next generation could afford to buy homes.

CB:  So what?

PO:  And have money left over to buy everything else.

CB:  So what?

PO:  So, it seems like the economy would boom... and keep booming.

CB:  So what?

PO:  Don't we want the economy to boom?

CB:  Which economy?  Our economy or theirs?

PO:  Huh?

CB:  Do you want your voters to be rich, or us?

PO:  Can't we have both?

CB:  Not unless you want to work for a living.

PO:  Right.  Sorry.  I always forget that part.

PO:  Catch you at the links next weekend.

CB:  Remember, $1000 per hole.

PO:  What, no inflation?

CB:  Working on it.

Thu, 07/31/2014 - 01:57 | 5026233 Sauerkraut-Opinion
Sauerkraut-Opinion's picture

I wish we would have this French "fairness doctrines" also in Germany. The real estate sector here is absolutely broken: On one hand the upper 3 percent including finance gamblers and tax evaders from all over crisis-Europe (e. g. Greece) pushing up housing prices inside the big cities - on the other hand the decay of prices in the countryside. In Germany gentrification is in full spate - has taken on a new dimension. The bubble becomes bigger.

French government obviously has learned from German mistakes and avoids this pervers development. I don't see what"'s wrong to protect home buyers and lodgers by law with mentioned "fariness doctrines" e. g. capping rents in expensive neighborhoods or boosting up the number of documents that must be provided by sellers.
In that point French policy is finally leading to a more sustained result.

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